The easiest way to avoid chicken-and-egg problems is simply to have a product that is useful on its own.
Del.icio.us, for example - it's just a bookmark manager that happens to be more useful as more people use it.
It's also possible to beat chicken-and-egg problems through sheer determination - after all, Reddit, YouTube, FaceBook, Snaptalent, and various other Web 2.0 companies have achieved it. The way to do it seems to be to make sure you're passionate enough about your own product to use it yourself (like submitting your own stories to Reddit, or how we all created 3-4 sockpuppets at inAsphere and had conversations with ourselves on the forums) and to get out there and put it in front of lots of other people. It's that last point where we failed: we just kinda built the product, launched it, and let it die.
It really helps to have a passionate, committed cofounder here. It's pretty difficult both to improve the product (which is critical if you want to show users that you really care enough to be in this for the long term) and to evangelize it.
From: http://diffle-history.blogspot.com
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